Defending the Fed

Now, here’s something you don’t see every day…

Amid a growing backlash against the Federal Reserve, whose popularity has been plunging in public opinion polls since they started spending trillion of dollars to prop up the financial industry, a lone voice defends their practices and argues against any audits.

Don’t Punish Fed with Audit
…
Is the Federal Reserve hiding the identities of banks who received up to $2 trillion in loans in the last year? Representative Ron Paul (R:TX) and now Representative Barney Frank(D: MA) think the Fed should be audited to reveal the names of these foreign and domestic banks. Federal Reserve Chairman Ben Bernanke opposes Paul’s audit bill, saying it would make it seem like the Fed was no longer setting interest rates independently of political oversight. This perception alone would increase inflation. However, the real threat is even worse than that.

The Federal Reserve has acted quickly and creatively to pull the economy back from the brink of a major depression. It did so because of its ability to act swiftly without going to Congress for approval. Secrecy was needed last year to allow banks to apply for liquidity from the Fed without fear they would be tagged as failing banks. Congressional auditing ability would seriously hamper the Fed’s ability to act at a time when this creatively and innovation is needed the most.

Well, that’s one school of thought.

There’s a completely different line of thinking that involves the central bank having been created by and for big banks in order to foist bank losses on the public while keeping the gains private.

Moreover, some object to the not-so-inconsequential matter of a nearly century long debasement of the currency, where America’s money has lost more than 90 percent of its value since the creation of the Federal Reserve in 1913.

And just what does Mrs. Amadeo think about money?

Her views are made abundantly clear at her website – World Money Watch.

Money is a mental concept. It is no longer based on anything tangible – not gold, not business values, and certainly not home values. Money has become an exchange of energy. As such, it provides a useful footprint that reflects the awareness level of the human race. Watching trends in the world’s money helps us track our evolution.

Well, that explains a lot.

Interestingly, there’s a section for comments on the About.com article.

After a brief survey, my favorite comment is the third one:

Pull your head out of your a$$

Of course we need to audit the Fed. All government activity should have accountability. It is almost treasonous not to hold the government accountable for their actions…

There are a total of 36 comments and, save for the one titled “I Love My Overlords” (which is believed to be facetious), none defend Ms. Amadeo or the Fed though a couple are critical of Ron Paul, figuring that Barney Frank has been brought on board to help Dr. Paul sell his forthcoming book titled “End the Fed“.

Tim Iacono is the author of the blog The Mess That Greenspan Made